When it comes to managing money, advice is everywhere—friends, family, social media, and more. The problem? Not all of it is true. In fact, some of the most common money “tips” are actually myths that could be standing in the way of your financial success. Let’s set the record straight.
Myth #1: You need to carry a balance on your credit card to build credit.
The truth: Carrying a balance only means you’ll pay interest. What actually builds your credit is making on-time payments and keeping your credit utilization low. If you can pay your balance in full each month, that’s the best strategy for your score and your wallet.
Myth #2: Renting is just throwing money away.
The truth: Homeownership is a great goal, but renting isn’t a waste. Rent provides you with a place to live without many of the costs that come with owning a home, such as property taxes, maintenance, and insurance. For many people, renting while saving for a down payment or paying off debt is a smart financial choice.
Myth #3: You should avoid all debt.
The truth: Not all debt is bad. While high-interest debt like credit cards can be harmful, some debt—such as student loans or a mortgage—can be considered “good debt” when managed responsibly. These types of loans can help you invest in your future or build equity. The key is understanding what you can afford and making payments consistently.
Myth #4: You need a lot of money to start investing.
The truth: Thanks to online platforms and apps, you can often start investing with as little as $5–$10. Waiting until you “have enough” means missing out on valuable time in the market. Even small contributions can grow significantly over time thanks to compound interest.
Myth #5: A budget means cutting out all the fun.
The truth: A budget isn’t about restriction—it’s about freedom. When you know where your money is going, you can set aside funds for things that matter most to you, whether that’s dining out, hobbies, or travel. A good budget balances financial goals with everyday enjoyment.
The Bottom Line
Don’t let money myths hold you back from reaching your goals. By separating fact from fiction, you’ll make smarter financial decisions and feel more confident about your future.
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